It has been observed that private equity funds in India’s real estate projects have increased by more than 75% over the past year, whereas at the same time mutual funds and other investments have decreased in this sector because of falling revenues and rising interests. The developers approach the private equity players because they are more open to negotiations.
According to accountancy and advisory firm, Grant Thornton, this is the main reason why private equity funds have soared rising to $1656 million in the year 2011 as compared to $944.7 million in the previous year while mutual funds reduced their exposure to the real estate sector during this period. The total investments in the sector due to mutual funds declined by 63.6% to Rs. 691.55 crore at the end of September whereas in the previous year it was Rs. 1900.83 crore according to the stats of Value Research, a Delhi based investment research firm.
Foreign financial institutions have also decreased their lending substantially in the real estate sector. At such a time, private equity heads of HDFC and Kotak Mahindra, have brought value to their business by investing in real estate projects. According to Mr. S Sriniwasan, CEO, Kotak Realty Fund much of the private equity money in 2011 came from domestic private equity funds with high debts and fixed returns ensuring lower risks
According to accountancy and advisory firm, Grant Thornton, this is the main reason why private equity funds have soared rising to $1656 million in the year 2011 as compared to $944.7 million in the previous year while mutual funds reduced their exposure to the real estate sector during this period. The total investments in the sector due to mutual funds declined by 63.6% to Rs. 691.55 crore at the end of September whereas in the previous year it was Rs. 1900.83 crore according to the stats of Value Research, a Delhi based investment research firm.
Foreign financial institutions have also decreased their lending substantially in the real estate sector. At such a time, private equity heads of HDFC and Kotak Mahindra, have brought value to their business by investing in real estate projects. According to Mr. S Sriniwasan, CEO, Kotak Realty Fund much of the private equity money in 2011 came from domestic private equity funds with high debts and fixed returns ensuring lower risks
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